Retail Reduced – April 2026

Less Healthy Food Advertising Regulations – Four Months On

In a previous edition of Retail Reduced, we flagged that increased regulations around the advertising of less healthy foods ("LHFs") had come into force on 5 January 2026. We are now four months into the new regime, and the ASA has now used the regulations to ban adverts for the first time – so, what has changed and what do retailers need to be thinking about?

The LHF Regulations

To summarise the new rules, paid-for adverts for identifiable LHFs are banned:

• On any TV broadcast (including on-demand broadcasts) regulated by Ofcom between the hours of 05:30 and 21:00.
• At any time online – this includes social media advertising including sponsored posts.

A food item is an LHF (and therefore within the scope of the regulations) if it meets two criteria. Firstly, the food item must be considered a food that is high in fat, sugar, and salt ("HFSS") in line with the Nutrient Profiling Model. Secondly, the food item must fall within one of the categories set out in the schedule to the Advertising (Less Healthy Food Definitions and Exemptions) Regulations 2024.  

The ASA has, for the first time, used these regulations to ban two adverts. The first banned advert, from a major supermarket, was a promoted social media post focused on a pastry that was deemed an LHF. The second ruling focused on two online banner ads showing a number of food items including meat, frozen food, and sweets – the latter were LHFs and brought the advert within the scope of the regulations.

However, the ASA also declined to uphold complaints about two other adverts. A takeaway restaurant's social media post was found to only feature foods that did not count as LHFs once the Nutrient Profiling Model was applied, while the brief appearance of a chocolate doughnut in a travel company's advert for their airport lounges was not considered to be an advert for an identifiable LHF.

(Low Fat) Takeaways for Retailers

The first thing for retailers to do is to establish whether their advertising falls within the scope of the regulations. There are a number of exceptions where the regulations don't apply – these include:

• Businesses with fewer than 250 employees.
• Adverts without any visuals (e.g. adverts on radio or podcasts).
• Adverts that aren't targeted at consumers (e.g. business-to-business advertising).
• Advertising at the point of purchase.
• A number of specific exemptions set out in the regulations.

Larger food retailers with more diverse advertising portfolios including broadcast and online advertising will likely fall within the scope, and should review their advertising accordingly.

Secondly, retailers should assess whether their adverts are promoting LHFs. This obviously includes any advert that directly advertises an LHF product, but may also catch other, less direct references. For example, an advert that promotes a number of products will be caught by the regulations if just one of the promoted products is an LHF. Similarly, an advert that features branding which is synonymous with an LHF product, or with a range of products where more than half are LHFs, is within the scope of the regulations and could be banned by the ASA.

Retailers should also consider whether the LHF products in their adverts are "identifiable". As the ASA's guidance states, "where product imagery is incidental to the main message, prominence matters". An LHF appearing on the shelves in the background of or incidentally to an advert for an unrelated product won't trigger the regulations, as long as no particular attention is drawn to the LHF. However, the safest approach would be to avoid showing LHFs at all unless they are directly relevant to the advert.

Employment Rights Act reforms now live: practical implications for retailers on the ground

April 2026 is a significant point for UK retailers, with the first phase of reforms under the Employment Rights Act now in force. While further changes are still to come, the measures taking effect this month have immediate implications for how retailers staff stores, manage absence, and plan workforce changes across their estates.

One of the most operationally impactful reforms is the change to Statutory Sick Pay. SSP is now payable from the first day of absence, with no lower earnings limit. This means that many part‑time, seasonal and lower‑paid retail workers who were previously outside the SSP regime are now covered. For retailers operating large store networks, this increases cost exposure and places greater emphasis on robust absence management processes to minimise disruption to rotas and customer service levels.

Retailers may also need to reconsider enhanced company sick pay schemes that were historically structured around SSP eligibility. Clear communication with store managers and payroll teams will be key to ensuring these changes are applied consistently across locations (link here).

Family leave reforms will also be felt at store level. Paternity leave and unpaid parental leave now apply from day one of employment, alongside a new entitlement to Bereaved Partner’s Paternity Leave. In a sector with high staff turnover and frequent new starters, managers will need to be confident in handling requests correctly from the outset to avoid inconsistent treatment between stores.

The British Retail Consortium has repeatedly highlighted that retail is the UK’s largest private sector employer and relies heavily on part‑time and flexible working models. In recent commentary, the BRC has emphasised that while greater worker protection is welcomed, reforms must be implemented in a way that recognises the operational realities of retail, including seasonal peaks, extended trading hours and fluctuating footfall.

April also brings increased financial risk around workforce reductions. The maximum protective award for failure to collectively consult has doubled from 90 to 180 days’ pay. Although changes to the collective redundancy thresholds are not due until 2027, retailers with multiple stores should already be ensuring they have visibility of proposed redundancies across the business to avoid unintentionally triggering collective consultation obligations (link here).

Finally, retailers should be aware of the broader enforcement backdrop. The new Fair Work Agency is being established with powers to investigate and penalise non‑compliance in areas such as SSP, holiday pay, national minimum wage and agency worker rights. This marks a shift towards more proactive enforcement in areas that are central to retail operations.

It is important to note further Employment Rights Act reforms affecting retailers are set to take effect across the rest of 2026 and into 2027.

Agentic AI in Retail

Agentic AI marks a significant change in how artificial intelligence can be utilised in the retail and consumer sector. Unlike traditional chatbots, which respond to predefined instructions, agentic AI systems are designed to act autonomously, pursuing a specific task or objective from start to finish with little to no human input. These systems can assess objectives, navigate online platforms, retrieve real-time data, and make independent decisions to achieve pre-determined goals. Agentic AI is already beginning to reshape consumer behaviour: shoppers are able to instruct AI agents to browse products, continuously monitor prices and availability, and even complete purchases of goods on their behalf.

The growth trajectory of agentic AI in commerce is striking. According to a Bain & Company report, AI agents could account for 15-25 percent of US e-commerce sales by 2030, with similar developments emerging across Europe. Retailers are deploying agentic AI for a range of uses including handling customer queries, processing refunds, recommending products, and managing marketing campaigns. Whilst this technology offers significant opportunities, it also brings heightened risks. By autonomously acting on a user's behalf, agentic AI raises concerns around manipulation, errors and loss of consumer agency.

UK regulators have been quick to respond. On 9 March 2026, the Competition and Markets Authority (CMA) published new guidance clarifying how business can ensure compliance with UK consumer protection law whilst using AI agents. The CMA clearly states that the same consumer laws apply regardless of whether consumers interact with humans or AI agents. Business remain fully responsible for what their AI agents do, even if the technology is supplied by a third party.

Key takeaways from CMA Guidance:

1. Transparency – inform your customers if you use an AI agent
   Businesses should not mislead customers about whether they are interacting with an AI agent, or about what that agent is capable of doing. Where the use of AI could influence a consumers' decision-making, businesses should make this clear.
2. Respect for consumer rights – training AI agents to comply with consumer law
   AI agents should be designed and trained to respect consumers' statutory and contractual rights, which include rights relating to pricing accuracy, refunds, cancellations and the provision of accurate product information. Testing is a critical part of training AI agents, including evaluating performance
3. Oversight and accountability – monitor how your AI agents are performing
   Regular and appropriate human oversight is essential in catching known risks such as hallucinations which result in nonsensical or inaccurate data. If an AI agent is not performing as expected, businesses must act quickly to address this, for example by refining prompts or workflows. This is particularly important where AI agents interacts with large numbers of people or with vulnerable customers.